David Lerner Associates: Financial Resolutions in Your 80s

David Lerner Associates: Financial Resolutions in Your 80s

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seniors in 80s financial resolutions


In this series of articles, we have been suggesting New Year’s financial resolutions that may be appropriate for each stage of life. This article offers three suggestions for New Year’s financial resolutions for individuals in their 80s.

Financial Resolution #1: Start planning for how you will pay for assisted living or nursing home care. If you are in your 80s and do not yet need assisted living or nursing home care, congratulations. Keep in mind, though, that if you live for another 10 years or longer, there’s a chance that you might need this care at some point in the future. A majority of people over age 65 will require some type of long-term care service during their lifetime, and over 40 percent of people will need to spend a period of time in a nursing home, according to the Centers for Medicare and Medicaid Services.

Over the past five years, the median annual cost of private nursing home care has risen from $67,527 to $83,950, according to Genworth's 2013 Cost of Care Survey — a jump of 24 percent. Meanwhile, the median annual cost of care in an assisted living facility has risen 23 percent over the past five years to $41,400. It’s reasonable to expect that these costs will continue to rise in the future as expenses like insurance, food, building maintenance and labor all go up.

Financial resolution #2: Finalize your estate plan. Ideally, this should be done before you reach your 80s, but it’s better to accomplish this resolution late than never. Go back and take a fresh look at your last will and testament and make sure that it still reflects your wishes in terms of who will receive your assets after you die. If you don’t have a last will and testament, make drafting one an immediate priority.

If you own substantial assets, you may need to meet with an estate planning expert to discuss estate tax reduction strategies. You’ll receive a federal estate tax exemption of $5.34 million (in 2014), or you and your spouse will receive a combined federal estate tax exemption of $10.68 million. If your total estate is larger than this, you may want to consider strategies that could reduce estate tax liability on your heirs after you die.

Financial resolution #3: Don’t be too frugal. “You’ve never seen a U-Haul behind a hearse,” the old joke goes. And it’s true: When you die, you can’t take any of your money or possessions with you.

Many people in their 80s become very conservative with regard to their spending for fear of running out of money before they die and becoming a burden on their children and grandchildren, or living out the rest of their lives in poverty. While it’s certainly wise to be responsible financially and not live beyond your means, you should also be careful not to go too far in this direction and fail to enjoy the money that you worked so hard during your life to save.

It’s a balancing act: Taking advantage of the freedom and flexibility that come with being retired and having resources to spend in order to enjoy your retirement, and making sure your retirement nest egg lasts for as long as you live — and ideally, having something left over as an inheritance for your heirs. Finding the right balance will be different for every individual and couple.

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities. Member FINRA & SIPC



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Founded in 1976, David Lerner Associates is a privately-held broker/dealer with headquarters in Syosset, New York and branch offices in Westport, CT; Boca Raton, FL; Teaneck and Princeton, NJ; and White Plains, NY. For more information contact David Lerner Associates 1 877 367 5960 http://www.davidlerner.com

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Jake Mendlinger
Account Manager
516.829.8374 X 232

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